Jk software jks a public company with quarterly reporting

Reference no: EM13607682

JK Software (JKS), a public company with quarterly reporting, signed a contract with JR Gardens on November 1, 2009. The contract sets forth the arrangements wherein JKS sells JR Gardens software and provides post-contract support (PCS). The agreement stipulates that the software will be delivered on December 15, 2009, and the PCS will commence on January 1, 2010, and continue through December 31, 2010. The software will be fully functional at delivery. The sales price that is stated in the agreement for this combined product is $500,000 and is to be paid upon delivery of the software.

JKS has never sold software without also providing PCS. Likewise, they do not provide PCS without having also sold the client the software. In addition, they have no plans of separating these services in the future. Other vendors have sold similar software for the following amounts:

Vendor Software PSC
AB $ 400,000 $ 250,000
CD $ 500,000 $ 50,000
EF $ 400,000 $ 200,000
GH $ 300,000 $ 300,000

The costs related to both the software and the PCS arrangement are significant and easily measurable.
Required
a) Discuss what the general rules under US GAAP are for this transaction. Relevant literature is SOP 97-2 (ASC 985-605), Software Revenue Recognition. When, and how much, revenue is recognized by JK Software under US GAAP? Please provide all necessary journal entries.

b) Discuss what the general rules under IFRS are for this transaction. Relevant literature is IAS 18, Revenue. When, and how much, revenue is recognized by JK Software under IFRS? Please provide all necessary journal entries.

c) Which approach (US GAAP versus IFRS) do you think is better? Why?

Reference no: EM13607682

Questions Cloud

Charge is uniformly distributed around a ring of radius r : charge is uniformly distributed around a ring of radius r and the resulting electric field is measured along the rings

A production process is set to manufacture bolts with a : a production process is set to manufacture bolts with a diameter of .5 inches. the process has a standard deviation of

Find the monthly mortgage payment including taxes and : find the monthly mortgage payment including taxes and insurance. mortgage 66500 interest rate 6 term of loan 10 years

Peluso company a manufacturer of snowmobiles is operating : peluso company a manufacturer of snowmobiles is operating at 70 of plant capacity. pelusos plant manager is

Jk software jks a public company with quarterly reporting : jk software jks a public company with quarterly reporting signed a contract with jr gardens on november 1 2009. the

A 1-cm-thick layer of water stands on a horizontal slab of : a 1-cm-thick layer of water stands on a horizontal slab of glass. a light ray in the air is incident on the water 55

Lollar inc is a giant provider of home furnishings the : lollar inc. is a giant provider of home furnishings. the company uses the fifo inventory method. the following

Find the focal length of the lens that produces the image : consider an object with s12cm that produces an image with s115cm. note that whenever you are working with a physical

Assume a normal distribution with a mean of 70 and a : assume a normal distribution with a mean of 70 and a standard deviation of 12. what limits would include the middle 65

User Account

All Pages